Firms use SaaS and cloud computing instead of upgrading

A third of large UK companies are delaying infrastructure upgrades and software refreshes and turning to virtualisation, software as a service and cloud...

A third of large UK companies are delaying infrastructure upgrades and software refreshes and turning to virtualisation, software as a service and cloud computing as the recession bites into IT budgets, says the National Computing Centre (NCC).

Its latest survey of IT infrastructure plans shows that 23% of the large and multinational businesses polled are postponing hardware upgrades, and an equal number are holding off refreshing their software. In total, 30% of companies are delaying upgrades to their IT infrastructure.

Researchers said companies had more options for infrastructure solutions than ever. This made it hard to pick its optimum solution.

"The delivery of applications from a hosted environment - usually called software as a service (SaaS) - is growing in popularity," said Steve Fox, managing director of the NCC's Evaluation Centre. He said 30% of companies see SaaS as either a very important (16%) or important (14%) technology. A further 30% see it as of medium importance, with only 11% viewing it as of little importance and 7% as of no importance.

The provision of infrastructure services over the internet, known as "cloud computing", is still relatively new, Fox said. Even so, 11% of companies see it as very important and 11% as important to their future infrastructure, with a further 18% viewing it as of medium importance. But 39% of companies have yet to make up their minds about it.

"This confirms a trend that IT budgets are coming under severe pressure. Any projects that are non-essential or affect only the back office are coming under increased scrutiny," he said. "This will force companies to look more seriously at alternative delivery infrastructure such as SaaS and cloud computing."

Virtualisation is playing a bigger role in the IT environment as it can reduce both the cost of the infrastructure and its carbon footprint, Fox said. The survey shows that 42% of organisations have implemented server virtualisation, 28% are planning to, and 2% are evaluating it.

"Desktop virtualisation is the next area to gain momentum," Fox said. This is more complex because it has a direct impact on end-users, he said.

Thus far, 7% of companies have implemented desktop virtualisation across the whole organisation, 14% use it in some parts of the organisation, and 14% are planning to use it. A further 14% are evaluating the technology. Only 33% have no virtualisation plans.

"Virtualisation has almost been seen as a universal panacea for both cost saving and providing a 'greener' IT environment," said Cliff Mills, NCC's research manager. "However, the easy first phase of virtualisation has been done and the next steps will require even more careful planning and analysis to achieve real benefits."

NCC interviewed more than 100 companies. Twenty four per cent of respondents were from the public sector, followed by IT & telecoms (15%), banking & finance (12%), professional services (12%) manufacturing (10%), construction (8%) and healthcare (6%).

Thirteen per cent had turnovers of more than £5bn, 6% were in the £1bn to £5bn range, and 13% in the £500m to £1bn range. Twenty seven per cent had turnovers between £100 million and £500m, and 15% £50m to £100m. At the smaller end, 10% had a turnover between £10m and £50m and 17% £5m to £10m.

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